What is Limited liability company (LLC)?
In short
A limited liability company (LLC) is a business entity formed under state law whose owners (members) are generally not personally liable for its debts, and which can choose how it is taxed.
Key takeaways
- By default, a single-member LLC is disregarded for tax and a multi-member LLC is taxed as a partnership.
- It can elect to be taxed as a corporation, and then as an S corporation.
- It can be managed by its members or by appointed managers.
Where it's tested
REG: Business Law: Agency & Business Structures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A multi-member limited liability company that makes no tax election is treated, for federal income tax purposes, as a: